6705 pivot to hold today, possibly test 6760?

Good morning. Here we are, another NFP day so expect things to get rather lively around 13:30 today. We had a nice rise off the 6712 area initially yesterday after quite a sharp drop at the open (it did look like the bulls weren’t even on the pitch let alone in buying mood at one point as the price dipped to 6706, however, we then had a decent rise to 6745, before it went really rather bearish again. I thought we were going to be on for the 6670 but bulls brought it back and we are now back above 6715 as I write this – making that dip and bounce off 6677 look like it might have been flushing out stops in preparation for an NFP rise today. The bottom of the 10 day Raff held pretty well in the end yesterday, so there is still some bull pressure around, also worth watching the Bianca 10 day, with the channel bottom at  6681 and top at 6764 for today.

Asia Overnight from Bloomberg

Asia’s benchmark stock index swung between gains and losses as data showed China’s trade surplus narrowed and investors awaited a report on U.S. payrolls.

The MSCI Asia Pacific Index added 0.1 percent to 139.05 as of 3:04 p.m. in Tokyo, after falling as much as 0.4 percent. The gauge is heading for a 0.9 percent decline this week. A U.S. Labor Department report today is projected to show American employers added more jobs in 2013 than at any point in the past eight years. China’s export growth trailed estimates in December while import gains beat economists’ projections, government data showed today.

“A lot of weight now falls on the official non-farm payrolls reading, which is due out later today,” Stan Shamu, a Melbourne-based market strategist at IG Ltd., said by e-mail. “All this positive data continues to support the argument that perhaps the U.S. economy is ready for a rapid, measured winding back of stimulus.”

China’s overseas shipments rose 4.3 percent from a year earlier, the General Administration of Customs said today in Beijing. That was less than the median estimate for 5 percent growth from economists surveyed by Bloomberg News. Imports increased 8.3 percent, leaving a narrower-than-projected trade surplus of $25.64 billion.

‘Little Correlation’

“There has been very little correlation between U.S. growth and Chinese exports recently,” said Garry Evans, head of global equity strategy at HSBC Holdings Plc in Hong Kong. “It gives you some lead on where the Chinese economy is going, but I think you should not draw any conclusion that the weaker Chinese exports give you any lead on the global economic growth. I think it’s more of a specific Chinese story.”

Futures on the Standard & Poor’s 500 Index added 0.2 percent today. The measure gained less than 0.1 percent yesterday. The jobs report today may show total payrolls rose by 197,000 last month, according to a Bloomberg survey median. That would bring the total for the year to 2.27 million, the most since 2005.

Data yesterday showed applications for U.S. unemployment benefits declined by 15,000 to 330,000 in the period ended Jan. 4. The median forecast of economists surveyed by Bloomberg projected 335,000. The data can be volatile after the holidays as temporary workers are dismissed, a Labor Department spokesman said as the report was released.

The Federal Reserve announced after the December meeting that it would begin trimming monthly bond buying by $10 billion to $75 billion this month as the U.S. economy continues to improve.

FTSE 100 Prediction
FTSE 100 Prediction

FTSE Outlook

Shame the bulls gave up at 6750ish yesterday as a push to the top of the 10 day Bianca would have been ideal. Support wise on the daily we have both the 10 and 20 day Bianca’s at 6681 and 6689 respectively, as well as the 10 day Raff slightly lower at 6671. Basically there is decent support around that area still, as well as being yesterday’s low at 6677. The best trade yesterday was the long off 6712 though it did look a bit dicey initially. The 6705 short also worked out but failed to reach the target at 6670, with hindsight that maybe was a tad optimistic for a downside level.

Bulls will need to break 6722 today to push higher (thick red ProTrend line), to target 6747 initially, then the top of the daily channels at around the 6760 area (10 day Raff and Bianca), possibly even an overshoot to 6777. As with the S&P mentioned above I think the bulls might be a bit hard pressed to push on past those daily channel tops, so shorts around that 6760/70 area should be a good swing entry. That could tally with that 1848 S&P level.

Today’s pivot is 6705 and with the bounce from yesterday’s low setting up a bullish vibe, that may act as initial support. If so and then a breach of 6722 we should be on for a fairly decent climb before a dip, though its Friday, and NFP so some fairly big spanners are probably waiting to be thrown into the works. there is a 30 minute channel in play but its pretty narrow, I therefore expect it to be broken, and if the bulls continue then most likely that will be broken to the upside. I have put a fairly optimistic scenario below for the arrows, based on the assumption (always slightly dangerous to assume!) of the daily pivot holding. I think a few longs will have been stopped with yesterday’s dip, and a few bears might be trapped with shorts opened just sub 6700. The market might want to squeeze them just a little bit harder yet.

However, if 6722 holds as resistance (its actually just been tested while writing this) and the pivot breaks then 6679 and 6667 are supports.

So today, cautiously bullish but thinking we might get a decent dip off the top of those daily channels at 6765ish. 

158 Comments

  1. So far so good i went long just above yesterdays low. Decided to hold and am loving it right now.

  4. I sold and shorted at 6742 with a nice 40~ pip profit looking to see when this flips to sell and long again.

  6. I have problems viewing this site on Mozilla and Explorer, the text is on the right hand side and I don’t see the chart with arrows.

  7. Bought last nights dip at 6687 and closed last night at 6710 for a nice 23 points. Lesson – buy the dips !!

  8. Btw ppl i dnt have any positi9n.. i sold short yesterday at 6688.
    Im back on sidelines.
    Bear signal was short lived.

  10. how many people spreadbet/cfd on ftse futures instead of the underlying?
    If you do, don’t u find paying a 5 point spread too much?

  11. Lucas just a tip be very carful around 1.30 as this is a big news day so market will move very quickly up or down . It will gap 30/40 points and unless you have a guaranteed stop you will be taken out at the extreme end. If you are willing to ride a big move then stay in if not take your money. 1in the hand is worth 2 in the bush.

    1. and by the way, does anyone experience a weird view of the website?
      The text is on the right hand side in a narrow column.

  14. i think today at 6750 you will get 20-30 pips either short or long , as long as your on it , to close quickly , i think we will see next week both 6800 broken and 6700 before settling so short or long either way at 750 should produce decent pick up of pips

    1. Totally agree, i am looking at it to go short from here i can’t see it pushing 6750 imo.

      Think im guna be out for today as i am up 150 pips had a great day and don’t want to ruin it.

      Good luck bro!

  19. I kinda agree with Nick’s view today. One thing to remember is buy the rumour, sell the fact. It might be heading up like this for the big guys to make their money. If market drops after NFP, how many stop would be taken out in the process?
    My view is the markets drop from here. I would have loved to see the 6800 tough to get good sorting position.
    Gl all.

  20. Can I clarify for myself what is about to happen? In the past I was getting it always wrong so maybe somebody will advice on that.
    As I understand you set to short any spike whenever it happens. Basically to sell at a higher possible price. My common sense tells me that even if it carries on to 6800 or even higher it will definitely drop to 6700 within a week. On the other hand it is scary to short the top cos it could not be the actual top yet.
    I am planning to start building shorts above 6760. That’s the plan.

    1. In the past in such circumstance you expect it to spike on the open in order to short. But sometimes it actually drops and then spikes up. Basically I don’t know what’s going to happen.

      1. Jack, that’s just it, you never know what’s going to happen.
        My strategy is more medium term, that’s why I am short.

        I expect the market to drop to 6300, but that might not happen until 2 weeks time. You just never know.
        The good things is, I trade small and my equity can handle the ups and my trading platform gives me a small premium for keeping shorts open overnight, which helps 🙂

        I agree with yesterday’s comments: make your own strategy or lose your shirt. Don’t just trade based on the advise here…

        Gl

  21. Great call Nick – within touching distance of 6760. I have put the smallest of shorts in around 6740 – was tempted to add at 6750 but held back and its now pushed on. Dax seems to possibly be turning back so maybe 6760-70 will be the high water line.

    Nick you seemed to think we will drop back later/early next week – do you think the current uptrend is stalling now or are you not that bearish ?

    1. I tend to just go off the channels. We are now testing the top of the 10 at this 6765 area. BUT, decent bounce off the bottom yesterday. Looks like that dip was a stop killer though, in which case it should dip off the top of the channels as well. Unfortunately freaky Friday with NFP is always a bit dubious.

    1. Thinking about it. DAX hasnt spiked up so this is a local rise – i want to see it break the relentless trend this morning. Looks like the big guys having a bit of a laugh the way the market has moved in the last 36 hours

      1. Local rise, this is exactly how I would call it. I had an order to short 6780, but now I think 6800 could be on the cards.

  27. If the NFP makes the markets rumble, do we follow the direction it starts to go in, or will hte gap be so big it will be too late after it?

  28. I have no positions now, was long miners earlier but my view on the payrolls is to stand aside until the move begins.

  33. If you trade FTSE ftrs, one stretegy is to place a buy stop and a sell stop to enter, say 10 – 15 points either side of the current price.

  37. This is going down in my opinion will dive in once it starts to move generally goes the opposite way first

  43. So us figures not as good as expected. Is this a case of bad news being good news again? Are the fed still going to taper the bond buying? If they don’t taper will that cause a drop as people start to buy bonds again?
    Ah easier to flip a coin IMO.

    1. Complete confusion – missed most estimates by a country mile. But the FED had already signalled they thought QE was having less effect – so what happens now ! market isnt terribly sure what to make of it yet. I added to my short at 6767 – still fairly small. Will sit back and wait to see how this unfolds now

      1. The rate has drop to 6,7% and that is a problem for the market now. The Fed has indicated that they will look at increase in rates if the number drops to 6,5%!! so they only 0,2% away from it and 2 years earlier then they anticipated!!

  44. I try not to understand it, just trade the charts.

    Trying to understand why markets move the way they do will drive you nuts.

    1. I gave up trying to figure out what announcements will do to the market a long time ago – just funny listening the Bloomberg people figure out what it means! So as you say back to what the price is telling us – I remain short about 25% of my position and about break even. Now that spike us out of the way trying to see where the trend now is. I am happy to remain short at the moment but not adding yet. Other people’s thoughts ?

  45. CAN SOME ON PLEASE GIVE ME A LINK TO SOMETHING THAT WILL ALLOW ME TO SEE THE NFP AHEAD OF TIME IN THE FUTURE?

    THANKS

  47. Mo06 – I did exactly what you said with a futures contract order 10 points either side. Managed to bag £32. CHEERS. Nowhere near as much of dip or swing as we were hoping.

    1. Nice one, it is simple but it works as long as the move is big enough and then you can move your stop to protect profits.

      1. Yeah that’s what I did. I kept moving my close on it. The maximum I could have got was 50 but it bounced back to my stop at 30. Thanks.

        1. Nice thing about using stops to enter the market is that you are always going to be trading in the direction of the short term trend (just when other people are being forced to close their positions in fact) . I used to always use stops this when when I traded the futures with IB.

          Don’t forget this is a negative sum game, you have to inflict pain on others to profit.

        1. Yeah but i went short at 5770 and closed it for some stupid reason. Then went on to go short again when the downswing came missing the bottom and now at a loss. I always fuck up on fridays lol.

          Lets hope it keeps dropping!

          1. Yes. NFP is always a messy day. At least me didn’t press the button 1 minute before NFP (was going to press short though, but was afraid of the spike)

  49. Whats everyone feelings on this. I fucked up, i went short quickly at 6740 and stupidly forgot to put a limit so it hit low and his risen quickly i’m down now but not sure if to hold it out and hope it drops more or if to cut the losses now.

    Anyone?

      1. Well, to your consolation I went short 6749 and want to add if it goes higher. I only put 1/3rd of the stake.

          2. Closed for +10 points at 16.20ish. Wasn’t going down, higher lows started and end of the day. A bit annoyed as I needed to win more than 10, was+20 at some point, but well, waited till we crossed the trend line.

        1. You bet. And also what all other big players do.
          Examples :
          -7000 (or other number I don’t recollect right now) target issued from GS
          -The big short stake in S&P last year by Soros

          1. no i dont want to known the direction to trade the NFP just when the news will come out ahead of time. the same way you said in your morning breakdown that it would be around 1.30, how were you able to know this?

  54. Bang right in the middle of the range again. Cut my long at 7am this morning so missed most of the rise but still good profit so no regrets. Now feel a short is the right move but earnings season is underway and should be positive.

  59. no i dont want to known the direction to trade the NFP just when the news will come out ahead of time. the same way you said in your morning breakdown that it would be around 1.30, how were you able to know this?

  60. Closed my short. Accidentally went DFB and hate interest. Only got 2 points but poor entry by me anyway

  64. Despite the feints, including today’s spurt to ≈6770, the most obvious direction now for the FTSE is down imo. LinReg 100 is still rising on the daily chart, but the index is gradually closing in and is on track to cross below it in the next few trading days. If this happens, we might then see a steeper fall developing, repeating the pattern in evidence from late November through to mid-December.

  66. Are we not building a good base here? I went short thinking it would collapse into the close and it held firm despite US heading lower

  67. Lost all power in the house at 2pm and only came back at 430 – so had to spend the afternoon trying to keep track on the iPhone with flaky 3G connection – which was fun! Increased short slightly and surprised it didn’t slide much towards the end. Still think this is gradually going down a la November but it’s oh so slow. Can’t believe something hasn’t knocked us out of this range this year. So what’s the next big event that will move markets one way or another as today’s one hasn’t done a great deal – surely we don’t have to wait until end of month and the fed meeting?

  69. I am long Dow after shorting it down earlier. Next week is big up through 6800 jobs data although bad is good for a slowing down of any tapering.
    FTSE looks too strong

    1. But I wouldn’t bet on buying below 6776. If you want scalping it’s an excellent bet an open position above 6782.

  73. Not sure where all te confidence has suddenly appeared from. I am a massive bull but currently short -10. Ftse does seem really strong even when US was down heavily.

  76. X2 long Dow I like to trade FTSE morning Dow afternoon evening. Went short Dow at 2 once I saw direction and now long Dow still climbing after hours. See a strong up week next week for both.

  78. I’m inclined to agree with you and will exit with a small profit if possible next week. I am less than 10 points down so even a slight pull will get me out I hope! Good weekend all

  79. X2 this is only my opinion might very well do the complete opposite to what I think. Have a good one

  81. Hi all, any of the companies in FTSE posting results Tomorrow? Is there any results calendar? Thanks in advance.

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